Many today realize that money should not just lie on the shelf but should generate income. Investments are the most suitable solution for those looking for passive income and ready to develop in this area. If you are a beginner, try Forex. Such markets first appeared at the beginning of the 20th century but gained the most incredible popularity only a few years ago. Today, we want to discuss the prospects for developing this market and whether you should get a Forex broker license. Perhaps this information will be helpful to you, and you will be able to make the right decision.
Features of the functioning of the Forex market
The Forex market has relatively simple rules – brokers and financial institutions help investors buy currencies, including the US dollar and euro. It makes it possible to profit from currency fluctuations. Let’s look at how this works with a simple example. Let’s say you bought 1000 Czech crowns for 43 dollars. Within a month, the exchange rate of this currency increased, and you could sell them for $46. The more you invest, the greater your winnings will be. However, if the forecast turns out to be incorrect and the exchange rate falls, then on the contrary, you will lose money. Thus, to learn how to make money in this market, you should understand the financial market well.
Among the most essential advantages of this direction are:
- Global financial market – about 195 countries are part of this world, the average transaction amount is approximately 3.5 billion per day;
- Huge selection of currency pairs – you can trade more than 128 types of currencies;
- Ideal for beginners – most platforms have a free demo account;
- Low entry threshold – sometimes just 10 – 50 dollars is enough to get started;
- Trading is carried out 24 hours a day – there are 4 main trading sessions, each of which is located in different time zones;
- Different trading strategies can be developed.
Thousands of people are joining this global world, so new platforms and brokers are regularly emerging, ready to help them at different stages.
Since the interest in this industry is enormous, government agencies in different countries have begun to regulate it. So, they require brokers and various platforms to obtain permission to operate. Licensing involves going through a complex verification system and paying taxes during the entire operation. Still, in return, they can work entirely legally and place their advertising on most platforms, attracting more customers.
Can brokers operate without a license? It is likely that on the Internet, you will find many brokers who operate without permission. But the level of trust in them is shallow. This is because many scammers are on the market who simply take investors’ money. In addition, if the broker is licensed, investors can resolve controversial issues legally; they know their rights are protected.
Thus, if you want your business to grow, attract more clients, and operate in the right field, you must obtain a work permit and strictly follow the rules.
How do I get permission?
Today, there are a large number of jurisdictions that issue licenses for brokers. Each sets its own rules for regulating this market, so the choice of country must be given great attention.
However, most countries require roughly the same licensing steps:
- Register a company;
- Check whether your organization meets all requirements;
- Collect a package of documents;
- Open a bank account;
- Apply to regulatory authorities.
Your organization must be registered in the jurisdiction where you plan to obtain permission. In addition, some jurisdictions require hiring local employees and setting capital requirements.
On average, obtaining a license takes 1 to 6 months, depending on the jurisdiction. If government agencies notice the slightest inconsistencies in your organization or problems with documents, they may formally request to correct them, and then licensing may take longer.
It is challenging to understand all aspects of licensing on your own, so you should seek help from specialized Gofaizen-Sherle lawyers. They will conduct a full consultation, tell you about different jurisdictions, and answer any questions you may have. They will also help you collect the necessary documents and check how ready you are to obtain your license. They can represent your interests before regulatory authorities if necessary.